High-Tech Workers Class Action Lawsuit

Importance of Competition For High Tech Employees

Competition in the labor market results in better salaries, enhanced career opportunities for employees, and better products for consumers. Silicon Valley firms and other high-tech companies owe their tremendous successes to the sacrifices and hard work of their employees, and must take responsibility for their misconduct.

One of the principal means by which high-tech companies recruit employees is to solicit them directly from other companies in a process referred to as "cold calling."

No Solicitation, Anti-Poaching Agreements Lead To Workers Filing Class Action Lawsuits

On May 4, 2011, a former software engineer at Lucasfilm filed a class action lawsuit charging Adobe Systems Inc., Apple Inc., Google Inc., Intel Corporation, Intuit Inc., Lucasfilm Ltd., and Pixar with violations of antitrust laws by conspiring to fix and restrict the pay of their employees and entering into "no solicitation" agreements with each other.

On June 28, 2011, similar class action complaints were filed against the same defendants by former Adobe employees. On June 30, 2011, a new class action complaint raising the same allegations was filed by a former Intel employee.

Factual Allegations: No Cold Calling, No Recruiting, and Limit on Salary Offers Pacts by Adobe, Apple, Google, Intel, Intuit, Lucasfilm, and Pixar

The complaints seek lost compensation and treble damages for the anti-competitive employment practices of Adobe, Apple, Google, Intel Corporation, Intuit, Lucasfilm, and Pixar. The plaintiffs seek to represent a nationwide class of all employees who were harmed by defendants' unlawful agreements.

The complaints allege the defendants conspired and formed agreements to (1) not recruit each other's employees; (2) provide notification when making an offer to another's employee (without the knowledge or consent of that employee); and (3) cap pay packages offered to prospective employees at the initial offer.

Starting in 2005 with Lucasfilm and Pixar, and continuing until at least 2009 with all defendants, the companies entered into no solicitation, no cold-calling, no hiring, no poaching, and other anticompetitive agreements, with knowledge of the overall conspiracy and with the intent to reduce employee compensation and mobility. As additional companies joined the conspiracy, competition among participating companies for labor decreased. Compensation of defendants' employees was less than what would have prevailed in a properly functioning labor market where employers compete for workers.

The complaints follow an investigation by the U.S. Department of Justice. After that investigation was made public, defendants agreed to end the anticompetitive agreements. However, no compensation was provided to employees of defendants. The class action complaints seek lost pay for the employees who were targeted by defendants' alleged conspiracy.

Department of Justice Files Lawsuit Against eBay

On November 16, 2012, the U.S. Department of Justice and California Attorney General filed lawsuits against eBay alleging that Meg Whitman, the former CEO of eBay, conspired with the top executives of Intuit from 2006 to 2009 to not hire each other's employees, in violation of U.S. and California antitrust laws. The complaint alleges that during that time, eBay's recruiting staff were instructed to throw away resumes that came from Intuit employees.

Case Status

On Friday, October 28, 2011, Judge Koh denied Defendants' motion to stay discovery in part. Judge Koh ordered Defendants to produce by November 30, 2011 certain documents relating to the U.S. Department of Justice investigation of these practices, including the emails and other documents defendants turned over. Judge Koh also set a litigation schedule, culminating in a jury trial date set for November 12, 2013.

On April 18, 2012, Judge Koh allowed all antitrust claims in the case to go forward. In large part, the Court denied defendants' joint motion to dismiss the case.

On January 17, 2013, Judge Koh entered a case management order setting forth key deadlines in the case and requiring senior executives of Apple, Google, and other defendants to appear for depositions.

Contact Lieff Cabraser

Current and former employees of Adobe, Apple, Google, Intel, Intuit, Lucasfilm, Pixar, eBay and other high-tech companies who wish to learn more about this lawsuit or to report their experiences may contact us online. Or you may contact Lieff Cabraser attorney Dean Harvey at (415) 956-1000 or dharvey@lchb.com.

We wish to learn of your work and hiring experiences with these companies. There is no charge or obligation for our review of your claim. All information will be kept strictly confidential as provided under law.